Capio Capital Market Overview and Trade Ideas Asian stocks are trading firmer this morning, following the strength in US markets after the news that the Federal Reserve had decided to continue with its stimulus program. As in other markets, mining, energy, financial, industrial and property stocks led the markets higher. In Japan, Sumitomo Metal Mining Co rose 7.1%, yet exporters underperformed as the dollar traded to a 3 week low of 97.76 yen. In Australia, iron ore miners BHP Billiton and Rio Tinto are trading up 1.91% and 3.14% respectively, while Gold miner Newcrest Mining and Medusa Mining strengthened 7.4% and 12% respectively. Billabong International rallied 7.8% as they entered into a recapitalisation agreement with Centerbridge and Oaktree Capita US stocks closed at record highs on Wednesday after the Federal Reserve decided against scaling back on its asset purchase program. Gold and material stocks rallied after the news and Newmont Mining Corp rose 8.2%, with the NYSE Arca Gold bugs index rallying 9.6%, while the S& P materials index gained 2.3%. Homebuilder stocks also rallied on expectations that there would be downward pressure on mortgage rates and this would provide a boost to the housing market. The Philadelphia Housing Sector index rose 4.3%. European stocks were trading mostly firmer on Wednesday, led by strength in banking stocks as investors were anxiously waiting for news from the Federal Reserve on whether or not they will announce a reduction in asset purchases. The FTSE ended slightly lower, led by weakness in mining stocks, which offset the strength in the banking sector with Standard Charter PLC rising 1.37%. Technology firm, Smiths Group closed 2.33% higher after reporting results and announcing a special dividend. In Germany, Siemens AG rose 1.3% after they announced that Ralf Thomas is to be the new CFO. Heidelberg Cement rose 1.38% after being upgraded by Goldman Sachs. The JSE closed lower on Wednesday with weakness seen across the board. Abil Investments lost 4.51% after releasing a trading statement which warned that profits could decline as much as 63%, due to an increase in provisions for bad debts and a loss in its furniture unit, Ellerines. Retail stocks were under pressure with Truworths (-3.68%) and Foschini Group (-3.76%) the worst performers in the sector. Naspers Ltd, the most actively traded stock yesterday, retreated further to close down 3.92% at 91900. On a more positive note, ELB Group Ltd rose 9.85% after the company posted a 16% rise in HEPS. Trade Ideas 1) Long: KIO near R470. Stronger iron ore price should push the stock higher and stock is a non dual listed so stronger rand doesn’t effect it. Short term target price R500. 2) Long: SHP close to R167, stock has technical support at the R165 level. Stronger rand should support the upwards move. 3) Long: BAT near R41.50. The stronger rand should support a move higher. We are buyers and traders at these levels, with a short term target price of R43.50.
Posted on: Thu, 19 Sep 2013 07:25:35 +0000
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